Getting Its 787s Back Won't Save Air India

When Boeing’s 787 Dreamliner was grounded in January after fires involving its lithium batteries, few airlines were more rattled than Air India. The financially ailing carrier has based much of its turnaround plan on the fuel-sipping all-composite jetliner. Only a few months earlier it had begun flying the aircraft on long-haul international routes meant to lure business flyers traveling to, and through, the subcontinent. Lucrative long-haul flights have helped turn Middle East carriers such as Emirates into major global airlines. Yet even though Boeing’s battery fix has been approved by regulators and the Indian carrier’s six 787s could return to service as early as May, there’s still turbulence ahead for the airline.

That’s because Air India has plenty of other planes that won’t be leaving the tarmac anytime soon. The reason: It simply can’t afford to fly all its aircraft. The carrier, which has lost at least 281 billion rupees ($5.2 billion) since April 2007, is saddled with $8 billion in debt. It owes 42.5 billion rupees to jet fuel suppliers, Panabaka Lakshmi, India’s junior minister for petroleum and natural gas, said in parliament on March 8. Among its 16 grounded planes are leased jets it hasn’t returned to their owners because it can’t afford to refurbish them. “Some are just empty shells standing,” scavenged for spare parts, Air India Chairman Rohit Nandan says about the parked aircraft.